'Meet PillPack': Amazon rolls out Rx delivery direct marketing

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Dive Brief:

Amazon has begun marketing PillPack's at-home prescription drug delivery to Amazon Prime members via email and created a webpage about the service. Some customers reported Tuesday they received emails about the monthly medication delivery service, touting zero shipping costs and increased convenience.

It's unclear how many people received the email marketing or how Amazon is targeting the rollout, as some of the 100 million-plus Amazon Prime members reported not getting the early messaging.

The marketing effort so far targets chronic conditions. The medications highlighted on the PillPack packaging include high blood pressure drugs amlodipine and lisinopril and diabetes drugs glipizide and metformin. Amazon, which did not respond to a request for comment, is set to release its earnings post-market Thursday.

Dive Insight:

"Meet PillPack, a new member of the Amazon family," the email reads. "Our service and shipping are free — you pay only for your medication."

The marketing provides a peek behind the curtain of the famously secretive e-commerce giant, which has edged into healthcare in recent years and sent shocks to traditional players fearing disruption.

Amazon announced its $1 billion acquisition of PillPack in June, sending shares of retail pharmacy companies like CVS Health, Rite Aid and Walgreens plummeting. PillPack delivers individualized packages of pre-sorted medicines, meant to help people manage multiple daily medications such as people with chronic conditions. The company said it is licensed to ship prescriptions to all states except Hawaii and can fill schedule III, IV and V medications.

But Amazon has been relatively quiet on the prescription drug front since then, though it has been steadily applying for more per-facility state licenses as it spent the year expanding PillPack's reach. Over the past few months it has secured approval from nine additional state pharmaceutical boards to expand distribution capabilities from its Arizona facility.

As Amazon increases its pharmaceutical capacity and shortens delivery times, it "should be able to offer rapid delivery for not just medicine but also many types of medical products, from diagnostic tools to medicines and treatments," Justin Smith of research firm TJI Research said in response to the email reports.

Jay Hancock, a Kaiser Health News correspondent and one of the first Amazon Prime customers to flag the email, is 62 (three years away from Medicare) and doesn't have any regular prescriptions.

"I don't know why they picked me," Hancock told Healthcare Dive.

Peers in the space like CVS and Walgreens have revamped their offerings to keep up with the international retail company. CVS announced it would be expanding its prescription drug delivery platform nationwide last year. As of April, CVS offers same-day delivery to 6,000 CVS pharmacies for a flat fee of $7.99, leveraging its many brick-and-mortar facilities to seek a competitive edge on the more-centralized Amazon.

Amazon is expected to perform well in its first quarter 2019 earnings, dropping after close-of-market Thursday. Analysts expect net sales of somewhere between $56 and $60 billion, yielding year-over-year growth of 10% to 18%.